Washington, D.C., February 27, 2018—Emerging
markets have become a major force in driving development and fighting climate
change, as 34 countries have initiated banking reforms to expand sustainable
lending, according to the first comprehensive Global Progress Report of
the Sustainable Banking Network, an IFC-supported organization of banking
regulators and associations.
Three SBN members are advancing sustainable
finance in Africa: Kenya, Nigeria and South Africa. Nigeria is leading
the way as the most advanced, with the Nigerian Sustainable Banking Principles
and guidelines for high risk sectors in place since 2012. The
report underlines several good practices introduced in Kenya, where the
Sustainable Finance Initiative Guiding Principles are endorsed by the national
banking association and the Kenyan Central Bank, and include not only environmental
and social aspects, but also governance issues.
In South Africa, the voluntary
Principles on Social and Environmental Risk Management were developed by
the banking association, with the active participation of 32 South African
and international banks. Along
with industry associations and regulatory agencies, the National Treasury
is leading efforts to develop a national shared vision for sustainable
finance to be launched this year.
The 34 countries globally covered in the
report account for $42.6 trillion in bank assets—more than 85 percent
of total bank assets in emerging markets. Some are wealthier than others,
but all of them have made progress in advancing sustainable finance. Eight
countries—Bangladesh, Brazil, China, Colombia, Indonesia, Mongolia, Nigeria,
and Vietnam—have reached an advanced stage, having implemented large-scale
reforms and put in place systems for results measurement. These reforms
require banks to assess and report on environmental and social risks in
their lending operations and put market incentives in place for banks to
lend to green projects.
“This progress is an important step toward
achieving the Sustainable Development Goals by 2030,” said Ethiopis Tafara,
IFC’s Vice President for Legal, Compliance Risk and Sustainability. “It
shows that even the poorest countries can adopt sustainable finance reforms.
The Sustainable Banking Network has demonstrated in a short time how much
can be achieved when regulators, policymakers, trade associations and development
institutions collaborate to advance sustainable finance.”
The report provides practical indicators
and tools for countries to apply to their own domestic markets, regardless
of their size or stage of development. This is important because it facilitates
learning by all members and accelerates the pace of change. It is based
on an innovative results-measurement approach that has been agreed by all
34 member countries—a remarkable achievement that is breaking new ground
for measuring progress at the global level.
“The report provides concrete and practical
information to SBN member countries to help them develop sustainable finance
policy initiatives,” said Franklin Ahonkhai, Director, Financial Policy
and Banking Supervision, Central Bank of Nigeria, a member of the SBN Measurement
Working Group that led the development of the unique methodology behind
Emerging-market countries increasingly are
learning from one another as they adopt sustainable-finance policies, according
to the report. For example,
with SBN support, Mongolia Banking Association visited Kenya in March 2017
and learned from Kenya’s advanced e-learning platform to raise awareness
about sustainable banking practices, which has been used to train 80 percent
of Kenyan bank employees.
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
in the toughest areas of the world. In FY17, we delivered a record $19.3
billion in long-term financing for developing countries, leveraging the
power of the private sector to help end poverty and boost shared prosperity.
For more information, visit www.ifc.org
The Sustainable Banking Network (SBN) is a knowledge and capacity-building
platform of financial regulators, banking associations, and environmental
regulators from emerging markets committed to developing sustainable finance
frameworks based on national context and priorities, as well as international
good practices. IFC acts as the Secretariat of the Network, playing the
role of facilitator and technical adviser to SBN. For more information
on the Sustainable Banking Network, visit www.ifc.org/sbn.